Most people think they are smarter than average.

Now, think about that for a second. This would mean that 51% of us believe that our intelligence is greater than 50% of the rest of the people. That can not be. Most of us can not be smarter than most of us. Half are smarter. 49.999999% are smarter than average.

It works the same for outperforming. Mathematically, outperforming means doing better than no fewer than half of the rest of the performers. So, the fact that most home builders believe they'll outperform their peers--in delivering homes and care that home buying customers want, in delivering profits their stakeholders want, in delivering reliable, reasonable, profitable employment their trade crews want, in delivering value their land-seller partners want, etc.

Only so many builders--a quantity constrained by definition to less than half--can outperform the rest.

Take a look at this:

For the quarter ended December 31, 2015 LGI Home delivered 946 homes, up 45.1% from the comparable quarter of 2014. LGI had 542 active communities in December, up from 39 a year earlier. LGI focuses heavily (though not exclusively) on entry-level/first-time home buyers, and its average sales price in the quarter ended September 30, 2015 was about $186,000. LGI also reported that its home closings totaled 232 in January, up 51.6% from the previous January, and that it had 54 active communities in January compared to 42 a year ago.

Now, there's an outperformer.

Fact is, LGI Homes' growth is an anomaly. They're a cannon-shot, from rounding-error volume into what's looking like top 15 home builder turf in lightning speed, mostly with organic, de novo expansion and growth, and a template that's worked for every new ground they've gone into so far. Meet a need. Particularly, meet the need of working people who're anxious to get out of rental apartments into homeownership.

Few, if any, are going to outperform at this level. However, it's going to be outperformers, not average performers, who are going to make it whole and intact through the next tough stretch of the recovery.

Average really is over in home building. Growth will occur this year, and it will look in the headlines as if it's distributed, national growth. But it's not. It will be outperformers growing, not average performers.

Most builders believe they're outperformers, just the way most people believe they're smarter than most people. Mathematically, it's just not possible. Less than half---okay, slightly less than half--of builders will outperform the average among peers.

Which means that more than half are overconfident. Daniel Kahneman says that overconfidence is the bias he'd like to eliminate most if he had a magic wand. But, as the Guardian staffer David Shariatmadari quotes from Kahneman, overconfidence “is built so deeply into the structure of the mind that you couldn’t change it without changing many other things.”

So, more builders than is mathematically possible believe they will outperform the rest.

Enough said?